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ProCurve offers VARs incentive

Hewlett-Packard’s (HP) ProCurve networking unit has launched a new incentive
scheme that rewards resellers for recruiting public sector customers.

The programme offers VARs that introduce a new customer to ProCurve a three
per cent margin on all ProCurve sales until March next year. A new customer is
classified as one that has not purchased ProCurve products since January 2003,
and resellers will have to identify new customers by October of this year.

The firm is also offering the education sector a summer promotion of a 10 per
cent discount to tap the market in its most active period.

Luana Holland, ProCurve marketing manager UK, said: “We know there are a lot
more public sector VARs out there that we are not getting to. The programme
rewards any reseller by giving more margin to new business they acquire.”

Jon Weatherall, HP ProCurve country manager for the UK and Ireland, said:
“The public sector has always been price-competitive as customers tend not to
throw money around like companies in the banking and finance sector.” The news
coincides with HP releasing its third quarter results (see box) with ProCurve
chalking up strong growth of 91 per cent year on year in the UK.

However, one source was cautious of the ProCurve reward scheme and feels that
some bonuses do not justify the efforts of resellers. “Considering VARs are
recommending a public sector account, three per cent is a small margin for the
effort needed,” said the source. “If I were to refer a larger account I would be
asking for a larger margin.”

The source added that resellers should not have to rely on vendor margin
incentives and if resellers establish good customer relationships, then a
healthy gain should be attainable.